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Sweden raises cost of borrowing again

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Sweden raises cost of borrowing again

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As expected Sweden’s central bank has raised its benchmark interest rate from 1.75 percent to 2.0 percent to try to rein in rising inflation. It is the seventh increase in a year.

Sweden’s economy is one of Europe’s fastest growing, however the central bank slightly adjusted down its growth forecast for this year and next indicating it thinks growth has peaked.

The Riksbank is worried about the risks to Sweden’s export-dependent economy from the euro zone debt crisis and a weak recovery in the US.

In a statement the bank said: “The Swedish economy is growing at a good rate, although international developments are marked by uncertainty.”